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Angry Bids
by William Volk on 11/28/11 02:46:00 pm   Expert Blogs   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

[According to a New York Times report, Angry Birds Developer Rovio turned down a $2.25 billion bid this past summer from Zynga.  What's behind that decision?]

With over 500m downloads, Angry Birds is clearly a phenomenal success.  However Two and One Quarter Billion Dollars is also a phenomenal bid.  So ... if true, what's behind the rejection of this offer?

This isn't the first example of a Zynga offer being turned down.  In July, Zynga lost a bid for PopCap, a mobile game company. Zynga offered $950 million in cash.  PopCap eventually was purchased by EA for a smaller bid of worth $750 million in cash and stock with the potential of an additional $550 million if certain earnings goals were met.

One of the reasons stated by PopCap for this decision was concern about Zynga's reputation after hearing rumors of the company’s rescinding share awards and fierce internal competition.  The story is that Zynga has been asking some early hires to turn in shares or face dismissal.  Not something to warm the heart of potential acquisitions.

Beyond that, Peter Vesterbacka believes that Angry Birds is their "Mickey Mouse" ... characters with strong appeal that Rovio can build a 'Disney' size company and products around.  That may be true.

Still, it's interesting to see how company culture issues can trump dollars.  Something to think about. 


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Comments


Lennard Feddersen
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If was an investor in Rovio I wouldn't be happy to see that offer rejected.

Stephen Chin
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That depends. As an investor, if you're just looking for money, it's a bad deal. As an investor, if you're looking to continue a company's success by maintaining the attributes that made it successful in the first place... maybe Rovio's hesistance is a good thing if they believe they would lose their culture.



Bigger studios with greater porfolios of work have died out because they got sucked up and management was not wise enough to leave what made them successful while changing only what wasn't truly working.

William Volk
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That's the point. Rovio are the developers. They bootstrapped the company and they don't have to do the deal if they don't love it. They clearly love what they are doing, based on the presentations I have seen by them.

Ron Alpert
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they really don't need to sell out - in fact I am somewhat surprised that Popcap actually did, because considering the levels that these guys operate at, "Money just really does not matter any more." However, it does make sense in certain cases to partner up with someone who will let you continue to operate exactly as you see fit, while perhaps sharing their considerable network with you. I suspect that's more the gist of what happened with the Popcap->EA deal, to a degree, and certainly in the case of a situation such as Activision-Blizzard in particular.

William Volk
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Yes, I believe the Blizzard deal had specific clauses regarding management roles etc. Seems to have worked very well for both parties.

Pieterjan Spoelders
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Smart move!

Terry Matthes
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A very refreshing thing to see :)


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